Hospitals, Drug Industry Argue over Outpatient Drug Discounts
On February 12, a coalition of pharmaceutical industry trade groups released a report on the 340B drug discount program. The report questioned whether hospitals and other providers receiving the discount are doing enough to benefit patients and called for the drug discounts to be more narrowly focused.As defined by the Health Resources and Services Administration (“HRSA”), which is the federal agency within HHS administering the 340B program, section 340B limits the cost of covered outpatient drugs sold to certain federal grantees, FQHCs and hospitals.
Safety Net Hospitals for Pharmaceutical Access (“SNAPA”) issued a response to the drug industry report, calling it an affront to the integrity of safety net caregivers across the country. A number of House and Senate Republicans have ongoing concerns over the direction of the program, although it is unclear what legislative actions they are currently pursuing.
MedPAC Chief Warns of Medicare Payment Crisis
On February 14, the House Energy and Commerce Committee Health Subcommittee held a hearing on Medicare payments to doctors. Glenn Hackbarth, Chairman of the Medicare Payment Advisory Commission (“MedPAC”), testified that replacing the current sustainable growth rate (“SGR”) is essential to ensuring seniors access to care.
During the question and answer session, Hackbarth spoke about the advantages of new payment models, threats to U.S. primary care and the dangers of Congress not replacing the SGR.
On February 13, Energy and Commerce Chairman, Rep. Upton (R-MI) told the American Medical Association (“AMA”) he hopes to have a “doc fix” bill on the House floor by the end of July or the first week of August. Last week, the Ways and Means and Energy and Commerce committees jointly floated a three-tiered SGR repeal proposal.
During the hearing, several energy and commerce Republicans suggested that Medicare Advantage be looked at for insights on reforming the physician payment system. Members also expressed concerns that hospital-heavy ACOs would lead to independent physician practices being “absorbed” by a bigger ACO in order to pursue new payment models, or they would remain in fee-for-service.
Final Rules on Essential Benefits Sent to White House
The White House has begun a final review of two major health reform rules. While neither rule carries a specific price, both are considered significant, meaning they carry an annual economic impact exceeding $100 million.
The first rule would create new standards for defining “essential health benefits” to be provided under the ACA. Among other provisions, the rule proposes a timeline for qualified health plans to be accredited in the health insurance exchanges currently being established. The rule takes effect in January 2014. The second rule involves establishing the parameters of programs designed to protect health insurers from financial losses. It would also take effect in January 2014.
Bills Introduced:
H.R. 418: Rep. Ros-Lehtinen (R-FL) introduced a bill intended to reduce Medicare fraud. The bill would double the fine and jail time for those convicted of Medicare fraud and require enhanced screenings of those applying to enroll as a Medicare provider, including background checks and unannounced site visits.
S. 236: Sen. Lisa Murkowski (R-AK) introduced a bill that would allow seniors to use their current Medicare coverage to see any physician, even one who does not participate in the Medicare program. The legislation would establish a Medicare payment option for patients and physicians to freely contract, without penalty, for Medicare fee-for-service items and services, while allowing Medicare beneficiaries to use their Medicare benefits. The AMA has endorsed the bill.
Next Week in Congress
Both the House and Senate will be out next week. Congress returns the week of February 25 and will need to address the budget sequester that is due to kick in March 1. It was reported that Senate Democrats have a proposal that would avert the sequester through January 2, 2014. House Republicans have signaled they will oppose a sequester replacement plan that includes increased revenue.
For more information, please contact John F. Williams, III at 317.977.1462 or jwilliams@hallrender.com.
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